On the heels of completing a combination of two of his investments — Lions Gate and Starz — Liberty Media and Liberty Global Chairman John Malone took a moment to chat on his way into the Allen & Co. conference in Sun Valley, Idaho. He explained why it makes sense to combine the two media companies, that are both "subscale" in their spaces of film and television. "This gives them an opportunity to be bigger, more aggressive in investing in content, and to try new things," he said.
Malone said that Lions Gate's acquisition of Starz will help even out a hit-driven business and mitigate risk. "Theatrical is a tough business. You can run hot and cold. The nice thing about the combination is that it reduces volatility, creates a stronger base with more predictability, longer-term bets. And they can retain a larger interest in the creative assets they produce."
With a long history of doing deals for tax efficiency, Malone has that consideration front and center in this move as well. He said this deal has an "immediate benefit to reduce tax leakage; that's very helpful when you put as much leverage on as this deal contemplates."